Dear NQ Mobile (NQ): Help Us Help You

By: Regal Point Capital

Source: Seeking Alpha

“Three things cannot be long hidden: The sun, the moon, and the truth.” – Buddha

If you’ve arrived at this post you’ve at least overheard the noise bellowing from the recent fight between Muddy Waters (MW) and NQ Mobile (NYSE:NQ). Both sides have delivered blows via long-winded reports, and other third party sources have shoved their way into the skirmish and followed suit. Amidst the chaos, the most important issue has been given far too little attention: Thetrue nature of NQ’s relationship with Yidatong (YDT) — the entity responsible for processing more than 22% of NQ’s revenue. Our purpose in writing this is not to make accusations, but rather to help uncover the facts.

We strongly encourage all stakeholders of NQ — shareholders, management, and customers — to help settle this issue once and for all. Although we currently maintain short exposure, we would have no problem exiting our short position and going long if NQ would present the details and come clean (assuming the facts lead to a bullish conclusion of course). In essence, we have no ego or emotion involved in our thesis. Our goal is to find the truth and make money for our partners.

We believe that the answers to the following three simple questions will help us get to that truth.